REPORT OF THE MEMBERS OF THE BOARD - MTR

REPORT OF THE MEMBERS OF THE BOARDThe Members of the Board have pleasure in submitting their Report and the audited statement of Consolidated Accounts for the

financial year ended 31 December 2019.

PRINCIPAL ACTIVITIES OF THE GROUPThe Group is principally engaged in the following core businesses – railway design, construction, operation, maintenance and

investment in Hong Kong, Macau, the Mainland of China and a number of overseas cities; project management in relation to

railway and property development businesses in Hong Kong and the Mainland of China; station commercial business including

leasing of station retail space, leasing of advertising space inside trains and stations and enabling of telecommunication services

on the railway system in Hong Kong; property business including property development and investment, management and

leasing management of investment properties (including shopping malls and offices) in Hong Kong and the Mainland of China;

investment in Octopus Holdings Limited; and provision of railway management, engineering and technology training.

The principal businesses of the Company’s principal subsidiaries and associates as at 31 December 2019 are set out in notes 24

and 25 to the Consolidated Accounts.

BUSINESS REVIEWThe Company has always been committed to providing comprehensive reviews of the Group’s business and performance in

different sections of its Annual Reports. A summary of the relevant sections in the Company’s Annual Report 2019 covering the

required disclosures under the Companies Ordinance is set out below for ease of reference.

Required Disclosures Relevant Sections

(1) A fair review of the Group’s business and a discussion and an analysis of the Group’s performance during the year ended 31 December 2019

• Chairman’s Letter (pages 10 to 13)• CEO’s Review of Operations and Outlook (pages 14 to 33)• Business Review (pages 34 to 69)• Financial Review (pages 70 to 79)

(2) Particulars of important events affecting the Group that have occurred since the end of the financial year 2019

• Chairman’s Letter (pages 10 to 13)• CEO’s Review of Operations and Outlook (pages 14 to 33)• Business Review (pages 34 to 69)

(3) Description of the significant risks and uncertainties facing the Group • CEO’s Review of Operations and Outlook (pages 14 to 33)• Business Review (pages 34 to 69)• Risk Management (pages 118 to 121)• Financial Risks – note 28B to the Consolidated Accounts (pages 231 to 232)

(4) Outlook for the Group’s business • Chairman’s Letter (pages 10 to 13)• CEO’s Review of Operations and Outlook (pages 14 to 33)• Business Review (pages 34 to 69)

(5) Details regarding the Group’s compliance with relevant laws and regulations which have a significant impact on the Group

• Corporate Governance Report (pages 94 to 114)

(6) Description of the Group’s relationships with its key stakeholders • Chairman’s Letter (pages 10 to 13)• CEO’s Review of Operations and Outlook (pages 14 to 33)• Business Review (pages 34 to 69)• Investor Relations (pages 82 to 83)• Corporate Responsibility (pages 84 to 89)• Human Resources (pages 90 to 92)• Corporate Governance Report (pages 94 to 114)• Company’s 2019 Sustainability Report to be published at the same

time as this Report in April 2020

(7) Description of the Group’s environmental policies and performance • Chairman’s Letter (pages 10 to 13)• CEO’s Review of Operations and Outlook (pages 14 to 33)• Corporate Responsibility (pages 84 to 89)• Company’s 2019 Sustainability Report to be published at the same

time as this Report in April 2020

MTR Corporation146

Biographical details of each Member of the Board and the Executive Directorate as at the date of this Report are set out on pages

130 to 142.

Members of the Executive Directorate• Dr Jacob Kam Chak-pui (Chief Executive Officer)• Adi Lau Tin-shing (Managing Director –

Operations and Mainland Business)• Roger Francis Bayliss (Projects Director)• Margaret Cheng Wai-ching (Human Resources Director)• Linda Choy Siu-min (Corporate Affairs Director)

• Dr Peter Ronald Ewen (Engineering Director)• Herbert Hui Leung-wah (Finance Director)• Dr Tony Lee Kar-yun (Operations Director)• Gillian Elizabeth Meller (Legal and European Business Director)• David Tang Chi-fai (Property Director)• Jeny Yeung Mei-chun (Commercial Director)

DIVIDENDS The Board has recommended to pay a final dividend of HK$0.98 per share (2018: HK$0.95 per share) and proposes that a scrip

dividend option will be offered to all shareholders of the Company (except for those with registered addresses in New Zealand or

the United States of America or any of its territories or possessions). Subject to the approval of the shareholders at the Company’s

forthcoming annual general meeting (“AGM”), the proposed 2019 final dividend, with a scrip dividend option, is expected to be

distributed on 16 July 2020 to shareholders whose names appear on the Register of Members of the Company as at the close of

business on 29 May 2020.

ACCOUNTS The financial position of the Group as at 31 December 2019 and the Group’s financial performance and cash flows for the year are

set out in the Consolidated Accounts on pages 182 to 262.

TEN-YEAR STATISTICS A summary of the results and of the assets and liabilities of the Group together with some major operational statistics for the last

ten years are set out on pages 80 to 81.

DIRECTORS Members of the Board (including Alternate Directors) and the Executive Directorate as at the date of this Report are stated below:

Members of the Board• Rex Auyeung Pak-kuen (Chairman)• Dr Jacob Kam Chak-pui (Chief Executive Officer)• Andrew Clifford Winawer Brandler• Walter Chan Kar-lok • Dr Pamela Chan Wong Shui• Dr Dorothy Chan Yuen Tak-fai• Cheng Yan-kee• Dr Anthony Chow Wing-kin• Dr Eddy Fong Ching• James Kwan Yuk-choi• Rose Lee Wai-mun• Lucia Li Li Ka-lai• Jimmy Ng Wing-ka• Benjamin Tang Kwok-bun• Dr Allan Wong Chi-yun• Johannes Zhou Yuan• James Henry Lau Jr

(Secretary for Financial Services and the Treasury)Alternate Directors:

– Andrew Lai Chi-wah– Joseph Chan Ho-lim– Alice Lau Yim

• Secretary for Transport and Housing (Frank Chan Fan)Alternate Directors:

– Under Secretary for Transport and Housing (Dr Raymond So Wai-man)

– Permanent Secretary for Transport and Housing (Transport) (Joseph Lai Yee-tak)

– Deputy Secretaries for Transport and Housing (Transport) (Kevin Choi and Sharon Yip Lee Hang-yee*)

• Permanent Secretary for Development (Works) (Lam Sai-hung)Alternate Director:

– Deputy Secretary for Development (Works)2 (Mak Shing-cheung)

• Commissioner for Transport (Mable Chan)Alternate Director:

– Deputy Commissioner for Transport / Transport Services and Management (Macella Lee Sui-chun)

* Change of holder of the post from Rebecca Pun Ting-ting to Sharon Yip Lee Hang-yee with effect from 15 July 2019.

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147Annual Report 2019

REPORT OF THE MEMBERS OF THE BOARD

In addition, a resolution for electing Dr Bunny Chan Chung-bun as a new Director will be proposed at the 2020 AGM. Please refer

to the Company’s circular containing the Notice of the 2020 AGM sent together with this Report.

Members of the Board and the Executive Directorate who were directors during the course of 2019 but have since retired / resigned

from the Company are stated below:

• Professor Frederick Ma Si-hang (retired on 1 July 2019)• Lincoln Leong Kwok-kuen (retired on 1 April 2019)• Vincent Cheng Hoi-chuen (retired on 22 May 2019)

• Lau Ping-cheung, Kaizer (retired on 22 May 2019)• Abraham Shek Lai-him (retired on 22 May 2019)• Linda So Ka-pik (resigned on 16 January 2020)

DIRECTORS OF SUBSIDIARY UNDERTAKINGSThe directors of the subsidiary undertakings of the Company during the year and up to the date of this Report (unless otherwise

stated) are listed on page 176.

DIRECTORS’ SERVICE CONTRACTS No Director proposed for election or re-election at the forthcoming AGM has a service contract which is not determinable by the

Company or any of its subsidiaries within one year without payment of compensation, other than statutory compensation.

DIRECTORS’ MATERIAL INTERESTS IN TRANSACTIONS, ARRANGEMENTS OR CONTRACTS Except for, in respect of Mr James Henry Lau Jr (Secretary for Financial Services and the Treasury), Secretary for Transport

and Housing (Mr Frank Chan Fan), Permanent Secretary for Development (Works) (Mr Lam Sai-hung), and Commissioner for

Transport (Ms Mable Chan), all of whom were officials of Government, those connected transactions and continuing connected

transactions between the Company and Government (and/or its associates) which are described on pages 154 to 174, there was

no transaction, arrangement or contract of significance in relation to the Group’s business, to which the Company or any of its

subsidiary undertakings was a party and in which a Member of the Board or a Member of the Executive Directorate or an entity

connected with him/her had a material interest (whether direct or indirect), which was entered into during the year or subsisted

at any time during the year.

DIRECTORS’ INTERESTS IN SHARES AND UNDERLYING SHARES OF THE COMPANYAs at 31 December 2019, the interests or short positions of the Members of the Board and the Executive Directorate in the shares,

underlying shares and debentures of the Company (within the meaning of Part XV of the Securities and Futures Ordinance

(Cap. 571 of the Laws of Hong Kong) (“SFO”)) as recorded in the register required to be kept under section 352 of the SFO or as

otherwise notified to the Company and the HKSE pursuant to the Model Code set out in Appendix 10 of the Listing Rules (the

“Model Code”), were as follows:

Members of the Board/ Alternate Directors/ Members of the Executive Directorate

No. of Ordinary Shares heldNo. of share

options#No. of award

shares#

Total interests

Percentage of aggregate

interests to total no. of

voting shares in issueD

Personal interests*

Family interests†

Other interests

Personal interests*

Personal interests*

Dr Jacob Kam Chak-pui 281,171 – – – 333,984 615,155 0.00999Dr Pamela Chan Wong Shui 9,072 1,675

(Note 1)– – – 10,747 0.00017

Cheng Yan-kee – 2,000(Note 2)

– – – 2,000 0.00003

Rose Lee Wai-mun 3,350 – – – – 3,350 0.00005

MTR Corporation148

Members of the Board/ Alternate Directors/ Members of the Executive Directorate

No. of Ordinary Shares heldNo. of share

options#No. of award

shares#

Total interests

Percentage of aggregate

interests to total no. of

voting shares in issueD

Personal interests*

Family interests†

Other interests

Personal interests*

Personal interests*

Lucia Li Li Ka-lai – 1,614(Note 3)

2,215(Note 3)

– – 3,829 0.00006

Alice Lau Yim 1,116 – – – – 1,116 0.00002Mak Shing-cheung 558 8,058

(Note 4)– – – 8,616 0.00014

Dr Raymond So Wai-man – 1,675(Note 5)

– – – 1,675 0.00003

Adi Lau Tin-shing 91,495 – – 26,000 83,567 201,062 0.00327Roger Francis Bayliss – – – – 30,150 30,150 0.00049Margaret Cheng Wai-ching 116,339 – – – 84,384 200,723 0.00326

Dr Peter Ronald Ewen 46,698 – – – 76,135 122,833 0.00199Herbert Hui Leung-wah 42,707 2,233

(Note 6)– – 78,785 123,725 0.00201

Gillian Elizabeth Meller 108,141 – – – 79,950 188,091 0.00305Linda So Ka-pik 71,536 – – – 79,817 151,353 0.00246David Tang Chi-fai 193,985 – – – 84,634 278,619 0.00452Jeny Yeung Mei-chun 664,753 – – – 84,267 749,020 0.01216

Notes

As at 31 December 2019,

1 The 1,675 shares were held by Dr Pamela Chan Wong Shui’s spouse.

2 The 2,000 shares were held by Mr Cheng Yan-kee’s spouse.

3 The 1,614 shares were held by Mrs Lucia Li Li Ka-lai’s spouse and the 2,215 shares were jointly held by Mrs Li and her spouse.

4 The 8,058 shares were held by Mr Mak Shing-cheung’s spouse.

5 The 1,675 shares were held by Dr Raymond So Wai-man’s spouse.

6 The 2,233 shares were held by Mr Herbert Hui Leung-wah’s spouse.

# Details of the share options and award shares are set out in the sections headed “2007 Share Option Scheme” and “Executive Share Incentive Scheme” respectively on pages 150 to 152

* Interests as beneficial owner

† Interests of spouse or child under 18 as beneficial owner

D The Company’s total number of voting shares in issue as at 31 December 2019 was 6,157,948,911

Save as disclosed above and in the sections headed “2007 Share Option Scheme” and “Executive Share Incentive Scheme”:

A as at 31 December 2019, no Member of the Board or the Executive Directorate of the Company had any interest or short

position in the shares, underlying shares or debentures of the Company or any of its associated corporations (within the

meaning of Part XV of the SFO); and

B during the year ended 31 December 2019, no Member of the Board or the Executive Directorate of the Company nor any of

their spouses or children under 18 years of age held any rights to subscribe for equity or debt securities of the Company nor

had there been any exercises of any such rights by any of them,

as recorded in the register kept by the Company under section 352 of the SFO or otherwise notified to the Company and the

HKSE pursuant to the Model Code.

DIRECTORS’ INTERESTS IN SHARES AND UNDERLYING SHARES OF THE COMPANY (continued)

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SUBSTANTIAL SHAREHOLDERS’ INTERESTS Set out below is the name of the party which was interested in 5% or more of all the Company’s voting shares in issue and the

number of shares in which it was interested as at 31 December 2019 as recorded in the register kept by the Company under

section 336 of the SFO:

NameNo. of

Ordinary Shares heldPercentage of Ordinary Shares to all

the voting shares in issueD

The Financial Secretary Incorporated (“FSI”)(in trust on behalf of Government)

4,634,173,932 75.26%

D The Company’s total number of voting shares in issue as at 31 December 2019 was 6,157,948,911

The Company has been informed by the Hong Kong Monetary Authority that, as at 31 December 2019, approximately 0.33%

of the Ordinary Shares in issue (not included in the FSI shareholding set out in the above table) were held for the account of the

Exchange Fund. The Exchange Fund is a fund established under the Exchange Fund Ordinance (Cap. 66 of the Laws of Hong

Kong) under the control of the Financial Secretary.

OTHER PERSONS’ INTERESTSPursuant to section 337 of the SFO, the Company has maintained a register recording the shareholding information provided by

persons in response to the Company’s requests pursuant to section 329 of the SFO.

Save as disclosed above and in the sections headed “Directors’ Interests in Shares and Underlying Shares of the Company” and

“Substantial Shareholders’ Interests”, as at 31 December 2019, the Company has not been notified of any other persons who had

any interests or short positions in the shares or underlying shares of the Company which would be required to be recorded in the

register kept by the Company pursuant to section 336 of the SFO.

2007 SHARE OPTION SCHEMEMovements in the outstanding share options to subscribe for Ordinary Shares granted under the 2007 Share Option Scheme

during the year ended 31 December 2019 are set out below:

Member of the Executive Directorate and eligible employees

Date granted

Options granted

(Notes 1 to 3)

Period during which rights exercisable (day/month/year)

Options outstanding

as at 1 January

2019

Options vested

during the year

Options lapsed

during the year

Options exercised

during the year

Exercise price per share of options

(HK$)

Options outstanding

as at 31 December

2019

Weighted average

closing price of shares

immediately before the date(s) on

which options were exercised

(HK$)

Adi Lau Tin-shing 30/5/2014 80,000 23/5/2015 – 23/5/2021 26,000 – – – 28.65 26,000 –

Other eligible employees

30/3/2012 15,868,500 23/3/2013 – 23/3/2019 840,000 – – 840,000 27.48 – 46.40

6/5/2013 20,331,500 26/4/2014 – 26/4/2020 2,709,000 – – 1,323,500 31.40 1,385,500 47.67

30/5/2014 19,812,500 23/5/2015 – 23/5/2021 4,595,500 – – 1,098,000 28.65 3,497,500 48.26

Notes

1 No option may be exercised later than seven years after its date of offer and no option may be offered to be granted more than seven years after the adoption of the 2007 Share Option Scheme on 7 June 2007. The 2007 Share Option Scheme expired at 5.00 p.m. on 6 June 2014, with no further option granted since then.

2 Unless approved by shareholders in the manner as required by the Listing Rules, the total number of shares issued and issuable upon exercise of the options granted to any eligible employee under the 2007 Share Option Scheme together with the total number of shares issued and issuable upon the exercise of any option granted to such eligible employee under any other share option scheme of the Company (including, in each case, both exercised and outstanding options) in any 12-month period must not exceed 0.2% of the shares of the Company in issue at the date of offer in respect of such option under the 2007 Share Option Scheme.

3 The share options granted were subject to a vesting schedule in tranches of one-third each per annum starting from the first anniversary of the date of offer of the options (the “Offer Anniversary”) and became fully vested on the third Offer Anniversary.

4 Pursuant to the terms of the 2007 Share Option Scheme, each grantee undertakes to pay HK$1.00, on demand, to the Company, in consideration for the grant of the options.

5 Other details of the 2007 Share Option Scheme are set out in notes 11B and 42(i) to the Consolidated Accounts.

MTR Corporation150

EXECUTIVE SHARE INCENTIVE SCHEMEThe Company adopted the Executive Share Incentive Scheme (formerly the “2014 Share Incentive Scheme”) on 15 August 2014.

The purposes of the Executive Share Incentive Scheme are to retain management and key employees, to align participants’

interests with the long-term success of the Company and to drive the achievement of strategic objectives of the Company.

The Remuneration Committee may, from time to time, at its absolute discretion, determine the criteria for any eligible employee

to participate in the Executive Share Incentive Scheme as award holders in accordance with the rules of the Executive Share

Incentive Scheme. An award holder may be granted an award of Restricted Shares and/or Performance Shares (together, the

“Award Shares”).

Restricted Shares are awarded to selective eligible employees and vested ratably over three years in equal tranches (unless

otherwise determined by the Remuneration Committee). Performance Shares are awarded to eligible employees generally on a

three-year performance cycle (“Performance Period”), subject to review and approval by the Remuneration Committee from time

to time. The vesting of the Performance Shares is subject to the performance of the Company, assessed by reference to certain

pre-determined performance metrics approved by the Board for the relevant Performance Period and such other performance

conditions as determined by the Remuneration Committee from time to time.

The Award Shares to be granted under the Executive Share Incentive Scheme are issued Ordinary Shares. In general, the

Company will pay to the third party trustee (the “Trustee”) monies and may give directions or a recommendation to the Trustee

to apply such amount of monies and/or such other net amount of cash derived from Ordinary Shares held as part of the funds

of the trust to acquire existing Ordinary Shares from the market. Such Ordinary Shares will be held on trust by the Trustee for the

relevant award holders. The Trustee shall not exercise any voting rights in respect of any Ordinary Shares held in the trust and no

award holder is entitled to instruct the Trustee to exercise the voting rights in respect of any unvested Award Shares.

As part of the overall governance of the Executive Share Incentive Scheme, the Company reviews scheme features on a regular

basis to ensure continued relevance and effectiveness.

The maximum number of Award Shares that may at any time be the subject of an outstanding award granted under the

Executive Share Incentive Scheme shall not exceed 2.5% of the number of issued Ordinary Shares as at 1 January 2015, the

effective date of the Executive Share Incentive Scheme (the “Effective Date”).

For the year ended 31 December 2019, a total of 2,306,800 Award Shares (2018: 4,061,850 Award Shares, including a new cycle

of Performance Shares) were awarded under the Executive Share Incentive Scheme. As at 31 December 2019, a total of 5,659,978

Award Shares (2018: 5,758,295 Award Shares) were neither vested, lapsed nor had been forfeited, representing 0.10% of the

issued Ordinary Shares (2018: 0.10%) as at the Effective Date.

Further details of the Executive Share Incentive Scheme are set out in the section headed “Long-Term Incentives” under the

Remuneration Committee Report (pages 127 to 128) and notes 11C and 42(ii) to the Consolidated Accounts.

EQUITY-LINKED AGREEMENTSave as disclosed in the section headed “2007 Share Option Scheme” above, no equity-linked agreements were entered into

during the year ended 31 December 2019 or subsisted at the end of the year.

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The particulars of the Award Shares granted are as follows:

Members of the Executive Directorate and eligible employees

Date of award

Types of Award Shares granted

Award Shares outstanding

as at 1 January

2019

Award Shares vested during

the year

Award Shares lapsed and/or

forfeited during

the year

Award Shares outstanding

as at 31 December

2019Restricted

SharesPerformance

Shares

Dr Jacob Kam Chak-pui 8/4/2016 21,550 – 7,184 7,184 – –

10/4/2017 22,050 – 14,700 7,350 – 7,350

10/4/2018 25,550 50,450 76,000 8,516 – 67,484

1/4/2019 120,000 – – – – 120,000

8/4/2019 47,400 91,750 – – – 139,150

Lincoln Leong Kwok-kuen 8/4/2016 64,850 – 21,618 21,618 – –

(Note 1) 10/4/2017 63,900 – 42,600 42,600 – –

16/3/2018 80,000 – 80,000 80,000 – –

10/4/2018 73,300 239,950 313,250 73,300 – 239,950

Adi Lau Tin–shing 8/4/2016 8,400 – 2,800 2,800 – –

10/4/2017 17,700 25,050 11,800 5,900 – 5,900

10/4/2018 16,450 50,450 66,900 5,483 – 61,417

8/4/2019 16,250 – – – – 16,250

Roger Francis Bayliss (Note 2) 8/4/2019 – 30,150 – – – 30,150

Margaret Cheng Wai-ching 19/8/2016 71,428 – 23,810 23,810 – –

10/4/2017 16,950 30,400 11,300 5,650 – 5,650

10/4/2018 17,600 50,450 68,050 5,866 – 62,184

8/4/2019 16,550 – – – – 16,550

Dr Peter Ronald Ewen 8/4/2016 – 35,700 – – – –

10/4/2017 15,050 – 10,034 5,016 – 5,018

10/4/2018 12,250 50,450 62,700 4,083 – 58,617

8/4/2019 12,500 – – – – 12,500

Herbert Hui Leung-wah 10/4/2017 15,200 30,400 10,134 5,066 – 5,068

10/4/2018 14,200 50,450 64,650 4,733 – 59,917

8/4/2019 13,800 – – – – 13,800

Gillian Elizabeth Meller 8/4/2016 17,300 – 5,768 5,768 – –

10/4/2017 16,200 – 10,800 5,400 – 5,400

10/4/2018 16,050 50,450 66,500 5,350 – 61,150

8/4/2019 13,400 – – – – 13,400

Linda So Ka-pik 8/4/2016 16,400 44,050 5,468 5,468 – –

10/4/2017 15,300 – 10,200 5,100 – 5,100

10/4/2018 14,200 50,450 64,650 4,733 – 59,917

8/4/2019 14,800 – – – – 14,800

David Tang Chi-fai 8/4/2016 17,950 – 5,984 5,984 – –

10/4/2017 17,250 – 11,500 5,750 – 5,750

10/4/2018 16,850 50,450 67,300 5,616 – 61,684

8/4/2019 17,200 – – – – 17,200

Jeny Yeung Mei-chun 8/4/2016 18,850 – 6,284 6,284 – –

10/4/2017 17,700 – 11,800 5,900 – 5,900

10/4/2018 17,350 50,450 67,800 5,783 – 62,017

8/4/2019 16,350 – – – – 16,350

Other eligible employees 8/4/2016 2,235,850 107,450 589,668 585,532 4,136 –

10/4/2017 2,027,900 26,350 1,162,593 598,320 19,423 544,850

10/4/2018 1,985,150 1,078,900 2,784,450 641,457 112,288 2,030,705

8/4/2019 1,773,900 122,750 – 29,000 38,850 1,828,800

Notes

1 Mr Lincoln Leong Kwok-kuen retired as the Chief Executive Officer, and as a Member of the Board, the Corporate Responsibility Committee and the Executive Directorate of the Company, all with effect from 1 April 2019.

2 Mr Roger Francis Bayliss was appointed as the Projects Director and became a Member of the Executive Directorate of the Company, with effect from 18 March 2019.

MTR Corporation152

SHARES ISSUED No. of Ordinary Shares issued

Consideration/Value (HK$)

As at 31 December 2018 6,139,485,589 N/A

Shares issued under the 2007 Share Option Scheme (Further details can be found in note 42(i) to the Consolidated Accounts)

3,261,500 96 million (received by the Company)

Scrip shares issued in respect of 2018 final dividend 13,707,539 654 million

Scrip shares issued in respect of 2019 interim dividend 1,494,283 71 million

As at 31 December 2019 6,157,948,911 N/A

Details of the movements in share capital of the Company during the year are set out in note 39 to the Consolidated Accounts.

PURCHASE, SALE OR REDEMPTION OF LISTED SECURITIES The Group did not purchase, sell or redeem any of the Group’s listed securities during the year ended 31 December 2019.

However, the Trustee of the Executive Share Incentive Scheme, pursuant to the terms of the rules and the trust deed of the

Executive Share Incentive Scheme, purchased on the HKSE a total of 1,870,000 Ordinary Shares for a total consideration of

approximately HK$88 million during the year ended 31 December 2019 (2018: HK$239 million).

PUBLIC FLOAT The HKSE granted to the Company, at the time of its listing on the Main Board of the HKSE in 2000, a waiver from strict compliance

with Rule 8.08(1) of the Listing Rules (“Public Float Waiver”). Pursuant to the Public Float Waiver, the Company’s prescribed

minimum percentage of shares which must be in the hands of the public must not be less than 10% of the total number of issued

shares of the Company. Based on the information that is publicly available to the Company and within the knowledge of the

Directors, the Company has maintained the prescribed amount of public float during the year and up to the date of this Report as

required by the Public Float Waiver.

MAJOR SUPPLIERS AND CUSTOMERS Information in respect of the Group’s major suppliers and major customers for the year ended 31 December 2019 is as follows:

As a percentage of the Group’s total supplies

Total value of supplies (not of a capital nature) attributable to the Group’s five largest suppliers 17.60%

As a percentage of the Group’s total revenue

Total revenue attributable to the Group’s five largest customers 34.85%

Total revenue attributable to the Group’s largest customer 14.47%

As at 31 December 2019, no Members of the Board or the Executive Directorate or any of their respective close associates or any

Shareholder including the FSI, the substantial shareholder of the Company, (which to the knowledge of the Members of the

Board or the Executive Directorate, owned more than 5% of all the Company’s voting shares in issue) had any beneficial interests

in the Group’s five largest customers.

DONATIONSDuring the year, the Group donated and sponsored approximately HK$12.7 million (2018: approximately HK$12.2 million) to

charitable and other organisations.

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BANK OVERDRAFTS, BANK LOANS AND OTHER BORROWINGSThe total borrowings of the Group as at 31 December 2019

amounted to HK$39,456 million (2018: HK$40,205 million).

Particulars of the borrowings are set out in note 33 to the

Consolidated Accounts.

BONDS AND NOTES ISSUED The Group issued notes with total face value amounting

to HK$1,183 million equivalent during the year ended

31 December 2019 (2018: HK$1,491 million equivalent),

details of which are set out in note 33C to the Consolidated

Accounts. Such notes were issued in order to meet the

Group’s general corporate funding requirements, including

financing of capital expenditure and refinancing of debts.

LOAN AGREEMENTS WITH COVENANT RELATING TO SPECIFIC PERFORMANCE OF THE CONTROLLING SHAREHOLDER As at 31 December 2019, the Group had borrowings of

HK$32,183 million (2018: HK$32,446 million) with maturities

ranging from 2020 to 2055 and undrawn committed banking

facilities of HK$5,568 million (2018: HK$9,775 million), which

were subject to the condition that Government, being

the Company’s controlling shareholder, owns more than

half of all the Company’s voting shares in issue. Failure to

satisfy such condition may result in immediate repayment

of the borrowings being demanded and cancellation of the

undrawn committed banking facilities.

PROPERTIES Particulars of the principal investment properties and

properties held for sale of the Company are shown on pages

51 to 52.

CONNECTED TRANSACTIONSDuring the year under review, the transactions described

below were entered into with Government (which is a

substantial shareholder of the Company as defined in the

Listing Rules). Government is therefore a “connected person”

of the Company for the purposes of the Listing Rules, and

each transaction described below is a connected transaction

for the Company under the Listing Rules.

As disclosed in the announcement of the Company dated

13 January 2005, the Stock Exchange has granted a waiver to

the Company from strict compliance with the requirements

of Chapter 14A of the Listing Rules which would otherwise

apply to connected transactions and continuing connected

transactions between the Company and Government,

subject to certain conditions (the “Waiver”).

Consequently, the Company makes the disclosures below

in accordance with Rule 14A.71 of the Listing Rules and in

accordance with the conditions of the Waiver.

Land Agreements A On 7 May 2019, the Company accepted an offer dated

27 March 2019 from Government to proceed with the proposed

LOHAS Park Package Eleven Property Development

at Site C2 of The Remaining Portion of Tseung Kwan O

Town Lot No. 70 subject to payment of a land premium of

HK$3,054,900,000 and on the terms and conditions of the

relevant modification to New Grant No. 9689.

B On 5 November 2019, the Company accepted an offer

dated 25 September 2019 from Government to proceed

with the proposed Wong Chuk Hang Station Package

Four Property Development at Site D of Aberdeen Inland

Lot No. 467 subject to payment of a land premium of

HK$6,757,740,000 and on the terms and conditions of the

relevant Conditions of Exchange No. 20304.

C On 14 February 2020, the Company accepted an offer

dated 30 December 2019 from Government to proceed

with the proposed LOHAS Park Package Twelve Property

Development at Site D of The Remaining Portion of

Tseung Kwan O Town Lot No. 70 subject to payment

of a land premium of HK$2,725,000,000 and on the terms

and conditions of the relevant modification to New Grant

No. 9689.

MTR Corporation154

CONTINUING CONNECTED TRANSACTIONS During the year under review, the following transactions

and arrangements described below involved the provision

of goods or services carried out on an ongoing or recurring

basis and are expected to extend over a period of time

with Government and/or KCRC, the Airport Authority (the

“AA”), UGL Rail Services Pty Limited (“UGL”) and Leighton

Contractors (Asia) Limited (“LCAL”).

As noted above under the section headed “Connected

Transactions”, Government is a substantial shareholder of

the Company for the purposes of the Listing Rules. KCRC

and the AA are both associates of Government and they

are also connected persons of the Company as defined in

the Listing Rules.

Metro Trains Melbourne Pty. Ltd. is a company incorporated

in Australia, which is wholly-owned by Metro Trains Australia

Pty Ltd (“MTA”). The Company, UGL and John Holland MTA

Pty Ltd (“JHMTA”) own 60%, 20% and 20% respectively of

MTA and are, therefore, substantial shareholders of MTA.

Accordingly, UGL and JHMTA are connected persons of

the Company.

Since both UGL and LCAL are indirect wholly-owned

subsidiaries of CIMIC Group Limited, LCAL is an associate of

UGL and is also a connected person of the Company.

Therefore, each of Government, KCRC, the AA, UGL and

LCAL is a “connected person” of the Company for the

purposes of the Listing Rules and, during 2019, each

transaction set out at paragraphs I, II III, IV and V below

constituted a continuing connected transaction for the

Company under the Listing Rules.

In accordance with the Guidance Letter GL 73-14 issued

by the Stock Exchange and taking into account the Stock

Exchange’s recommendation, the Company’s Internal Audit

Department (“IAD”) has reviewed the Company’s continuing

connected transactions set out below and the related internal

control procedures. IAD found that the internal control

procedures put in place by the Company were adequate

and effective and reported the same to the Audit Committee

of the Company to assist the Company’s Independent

Non-executive Directors in their annual review and

confirmation required to be given pursuant to the

Merger-related Waiver (as defined below), the Waiver and

the Listing Rules (as appropriate).

I Merger-related Continuing Connected Transactions

Each of the transactions listed in paragraphs A to C below

(together, the “Merger-related Continuing Connected

Transactions”) and which formed part of the Rail Merger, was

approved by the independent shareholders of the Company

at an Extraordinary General Meeting held on 9 October

2007. These paragraphs should be read in conjunction with

the paragraphs contained in the section below headed

“Additional Information in respect of the Rail Merger”.

As disclosed in the circular issued by the Company on

3 September 2007 in connection with the Rail Merger,

the Stock Exchange granted a waiver to the Company

from strict compliance with the requirements under

Chapter 14A of the Listing Rules which would otherwise

apply to continuing connected transactions between the

Company, Government and/or KCRC arising as a result

of the Rail Merger, subject to certain conditions (the

“Merger-related Waiver”).

A Merger Framework AgreementThe Merger Framework Agreement was entered into on

9 August 2007 between the Company, KCRC and the Secretary

for Transport and Housing and the Secretary for Financial

Services and the Treasury for and on behalf of Government.

The Merger Framework Agreement contains provisions for

the overall structure and certain specific aspects of the Rail

Merger, including in relation to:

• a seamless interchange programme;

• corporate governance of the Company Post-Rail Merger;

• payments relating to property enabling works;

• arrangements relating to the establishment of a rolling

programme on the level of flat production arising from

tenders for railway property development;

• arrangements in relation to the assessment of land

premium amounts;

• arrangements in relation to the employees of the

Company and KCRC, including provisions preventing the

Company from terminating the employment of relevant

frontline staff for any reason that relates to the process of

integrating the operations of the Company and KCRC;

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• the implementation of certain fare reductions;

• arrangements in relation to the proposed Shatin to

Central Link;

• KCRC’s continuing responsibility for its existing

financial arrangements;

• treatment of KCRC’s cross border leases;

• the payment of HK$7.79 billion in respect of the Property

Package (as described on pages 156 to 157 and in

paragraph C below);

• the allocation of liability for any Pre-Rail Merger and Post-

Rail Merger claims by third parties; and

• the Company’s retention of its English name and

(pursuant to the Rail Merger Ordinance) the change of its

Chinese name to “香港鐵路有限公司”.

B West Rail Agency AgreementThe West Rail Agency Agreement and related agreements

were entered into on 9 August 2007 between the Company,

KCRC and certain KCRC subsidiary companies (the “West Rail

Subsidiaries”). Pursuant to the terms of the West Rail Agency

Agreement, the Company was appointed:

• to act as KCRC’s agent, and donee under powers of

attorney, to exercise certain rights and perform certain

obligations relating to specified development sites along

West Rail; and

• to act as agent for, and donee under powers of attorney

from, each of the West Rail Subsidiaries to exercise certain

rights and perform certain obligations relating to specified

development sites along West Rail.

The Company will receive an agency fee of 0.75% of the

gross sale proceeds in respect of the unawarded West Rail

development sites and 10% of the net profits accrued to the

West Rail Subsidiaries under the development agreements

in respect of the awarded West Rail development sites. The

Company will also recover from the West Rail Subsidiaries its

costs (including internal costs) incurred in respect of the West

Rail development sites plus 16.5% on-cost, together with

interest accrued thereon.

C Property Package Agreements

Category 2A Properties On 9 August 2007, Government entered into an undertaking

that it would issue to KCRC an offer for the grant at nil

premium of Government leases in respect of the land upon

which certain properties (the “Category 2A Properties”)

are situated (the “said Government Leases”). The Category

2A Properties were held by KCRC as vested land under the

Kowloon-Canton Railway Corporation Ordinance (Cap.

372 of the Laws of Hong Kong). On 9 August 2007, KCRC

entered into an undertaking that it would, immediately

after the grant of the said Government Leases referred to in

the preceding sentence, enter into agreements for sale and

purchase to sell the Category 2A Properties to the Company

(the “said Agreements for Sale and Purchase”). Assignments

of the Category 2A Properties to the Company shall then

take place pursuant to the said Agreements for Sale and

Purchase (the “said Assignments”).

The said Government Leases were issued to KCRC

respectively on 27 March 2009 and 31 March 2009. The

said Agreements for Sale and Purchase were entered into

between KCRC and the Company on 27 March 2009 and 31

March 2009 respectively and the said Assignments to the

Company were executed on 27 March 2009 and

31 March 2009 respectively. Deeds of Mutual Grant were

also entered into between the Company and KCRC on

27 March 2009 and 31 March 2009 respectively setting

out the easements, rights, entitlements, privileges and

liberties of the Company and KCRC in the land on which

the Category 2A Properties are situated.

Category 2B Property On 9 August 2007, Government entered into an undertaking

that it would issue to the Company an offer for the grant of

a Government Lease of a certain property (the “Category 2B

Property”) on terms to be agreed.

The basic terms offer for the Category 2B Property (i.e.

Trackside Villas) was issued and accepted by the Company on

31 December 2009 and Government Lease in respect of Tai

Po Town Lot No. 199 dated 29 March 2010 was issued for a

term of 50 years from 2 December 2007.

MTR Corporation156

Category 3 Properties On 9 August 2007, the Company entered into three

agreements (the “Category 3 Agreements”) and related

powers of attorney with KCRC. Each Category 3 Agreement

relates to a certain property (each a “Category 3 Property”).

KCRC has previously entered into a development agreement

in respect of each Category 3 Property. None of the rights

and obligations granted to or undertaken by the Company

under the Category 3 Agreements may be exercised or

performed by the Company if they relate exclusively to

concession property situate on any Category 3 Property.

Matters affecting the concession property situate on any

Category 3 Property are dealt with under the terms of the

Service Concession Agreement (as defined and summarised

on pages 172 to 173).

Pursuant to the terms of each Category 3 Agreement, the

Company has been appointed to act as KCRC’s agent, and

donee under powers of attorney, to exercise rights and to

perform obligations of KCRC which relate to the Category 3

Property (but excluding the right or obligation to dispose of

the relevant Category 3 Property).

The Company is required at all times to comply with statutory

restrictions and obligations binding on KCRC which relate to

the Category 3 Properties, and shall pay all amounts due and

payable from KCRC which have been incurred by KCRC as a

result of the Company’s actions.

In acting as KCRC’s agent, the Company is required to act

according to prudent commercial principles, and aim to

maximise gross profits under the Category 3 Properties

and to run a safe and efficient railway. In order to assist the

Company in performing its agency functions, KCRC has

granted powers of attorney to the Company. The Company

may only use the powers of attorney to exercise rights and

perform obligations conferred or undertaken by it under the

relevant Category 3 Agreement. As well as acting as KCRC’s

agent, the Company has the right to give KCRC instructions

in respect of any action or matter relating to each Category

3 Property (including its related development agreement)

which the Company is unable to take by reason of the

limitation of the scope of its agency powers. KCRC is required

to comply promptly with those instructions provided that it

is permitted under law, and under the relevant Government

grant, to carry out those instructions.

KCRC is required to account for revenue received in respect

of a Category 3 Property by way of balance sheet movement

(rather under its profit and loss account), provided that such

treatment is permitted under law and accounting principles

and practices.

KCRC shall not take any action in respect of a Category

3 Property which is not carried out by the Company

(acting as KCRC’s agent), or according to the Company’s

instructions, or otherwise in accordance with the terms of

the Category 3 Agreement.

As consideration for acting as KCRC’s agent, the Company

shall be paid a fee which is expected to be similar in quantum

to the profits made by KCRC in respect of the relevant

Category 3 Property (after deducting certain initial and

upfront payments and consultant contribution costs, in each

case paid or to be paid by the relevant developer to KCRC).

Generally, the Company’s fee shall be payable in instalments

promptly following receipt of relevant funds by KCRC (but

subject to specified deductions of amounts due from KCRC to

the relevant Category 3 Property developer).

The Company has agreed to give certain indemnities to KCRC

in respect of each Category 3 Property.

The Company shall be the first manager, or shall ensure that a

manager is appointed in respect of, each Category 3 Property

(once developed).

The Company’s appointment as agent shall terminate when

KCRC ceases to have any undivided share in the relevant

Category 3 Property, other than concession property, and

neither KCRC nor the developer nor the guarantors have

any further rights to exercise, or obligations to perform,

under the development agreement relating to the relevant

Category 3 Property.

II Non Merger-related Continuing Connected Transactions

The following disclosures, in paragraphs A1 to D below

together with the Third XRL Agreement (as defined below)

(together, the “Non Merger-related Continuing Connected

Transactions”), are made in accordance with the conditions of

the Waiver and Rule 14A.71 of the Listing Rules.

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A1 Entrustment Agreement for Design and Site Investigation in relation to the Shatin to Central LinkThe Entrustment Agreement for Design and Site Investigation

in relation to the Shatin to Central Link (the “First SCL

Agreement”) was entered into on 24 November 2008

between the Company and the Secretary for Transport and

Housing for and on behalf of Government.

The First SCL Agreement contains provisions for the design of

and site investigation and procurement activities in relation to

the proposed Shatin to Central Link, including in relation to:

• Government’s obligation to pay the Company up to

a maximum aggregate amount of HK$1,500 million

in respect of certain costs incurred by the Company

pursuant to the First SCL Agreement, including the

Company’s in-house design costs and certain on-costs

and preliminary costs;

• Government’s obligation to bear and finance the total

cost of the design and site investigation activities under

the First SCL Agreement (subject to the limit noted

above in respect of payments to the Company) and

arrangements for the payment of these costs directly

by Government;

• the Company’s obligation to carry out or procure the

carrying out of the design and site investigation activities

in relation to the proposed Shatin to Central Link;

• the limitation of the Company’s liability to Government

under the First SCL Agreement, except in respect of

death or personal injury caused by the negligence of the

Company, to HK$600 million; and

• should the railway scheme for the Shatin to Central Link

be authorised under the Railways Ordinance (Cap. 519

of the Laws of Hong Kong), the execution of a further

agreement by Government and the Company setting

out each of their rights, obligations, duties and powers

with respect to the financing, construction, completion,

testing, commissioning and putting into service the

works necessary for the construction and operation of the

Shatin to Central Link.

A2 Entrustment Agreement for Advance Works relating to the Shatin to Central LinkThe Entrustment Agreement for Advance Works relating

to the Shatin to Central Link (the “Second SCL Agreement”)

was entered into on 17 May 2011 between the Company

and the Secretary for Transport and Housing for and on

behalf of Government.

The Second SCL Agreement contains the following

provisions:

• in consideration of the Company executing or procuring

the execution of certain entrustment activities as set

out in the Second SCL Agreement and carrying out its

other obligations under the Second SCL Agreement,

Government shall pay to the Company the Company’s

project management cost. The amount of such project

management cost is to be agreed between the Company

and Government and prior to such agreement, the

project management cost shall be paid by Government

to the Company on a provisional basis calculated in

accordance with the Second SCL Agreement;

• the Company and Government may agree that the

Company will carry out (or procure the carrying out

of) certain additional works for Government (such

agreed additional works being “miscellaneous works”).

Miscellaneous works (if any) are to be carried out by the

Company in the same manner as if they had formed

part of the activities specified to be carried out under

the Second SCL Agreement and in consideration of the

Company executing or procuring the execution of such

miscellaneous works (if any) and carrying out its other

obligations under the Second SCL Agreement in relation

to such miscellaneous works (if any), Government shall

pay to the Company an amount to be agreed between

the Company and Government as being the project

management fee payable to the Company for designing

and constructing such miscellaneous works;

• Government shall bear all of the “Works Cost” (as defined

in the Second SCL Agreement). In this connection,

Government will make payments to the Company in

respect of the Works Cost on a provisional basis, subject

to adjustments when the final outturn cost of the Works

Cost is determined;

MTR Corporation158

• Government shall bear land acquisition, clearance and

related costs and those costs which are incurred by the

Lands Department in connection with the Shatin to

Central Link project;

• the maximum aggregate amount payable by

Government to the Company under the Second SCL

Agreement is limited to approximately HK$3,000 million

per annum and a total in aggregate of approximately

HK$15,000 million;

• the Company shall carry out or procure the carrying out

of certain enabling works on the expanded Admiralty

Station and the to be constructed Ho Man Tin Station,

the reprovisioning of the International Mail Centre from

Hung Hom to Kowloon Bay and other works as described

under the Second SCL Agreement;

• the Company’s total liability to Government under the

First SCL Agreement and the Second SCL Agreement,

except in respect of death or personal injury caused

by the negligence of the Company, is limited to the

aggregate fees that have been and will be received by

the Company from Government under the First SCL

Agreement and the Second SCL Agreement;

• the Company will provide to Government by the end of

each calendar month, a progress report on the activities

under the Second SCL Agreement that were carried out

in the immediately preceding calendar month and, within

three months following the completion of the relevant

works, a final report on the activities required to be

carried out under the Second SCL Agreement;

• the Company shall be responsible for the care of all

works constructed under the Shatin to Central Link

project from the commencement of construction until

the date of handover of those works to Government

and for completing or procuring the completion of any

outstanding works and/or defective works identified prior

to the handover of the works;

• during the period of twelve years following the issue of

a certificate of completion by the Company in respect of

work carried out under any contract with any third party,

the Company shall be responsible for the repair of any

defects in such work that are identified following the expiry

of any defects liability period under the relevant contract;

• the Company warrants that:

– in the case of those activities under the Second SCL

Agreement that relate to the provision of project

management services, such activities shall be carried

out with the skill and care reasonably to be expected

of a professional and competent project manager;

– in the case of those activities under the Second SCL

Agreement that relate to the provision of design

services, such activities shall be carried out with

the skill and care reasonably to be expected of a

professional and competent design engineer; and

– in the case of those activities under the Second

SCL Agreement that relate to the carrying out of

construction activities, such activities shall be carried


of, and by utilising such plant, goods and materials

reasonably to be expected from, a competent and

workmanlike construction contractor; and

• Government further undertakes to use reasonable

endeavours to provide the Company with assistance of

a non-financial nature, including taking all reasonable

steps to procure that all necessary licences and

consents, required in connection with the design,

construction and operation of the Shatin to Central Link

are given or granted.

A3 Entrustment Agreement for Construction and Commissioning of the Shatin to Central Link The Entrustment Agreement for Construction and

Commissioning of the Shatin to Central Link (the “Third SCL

Agreement”) was entered into on 29 May 2012 between the

Company and the Secretary for Transport and Housing for

and on behalf of Government.

The Third SCL Agreement contains the following provisions:

• in consideration of the Company executing or procuring

the execution of certain entrustment activities as set out

in the Third SCL Agreement and carrying out its other

obligations under the First SCL Agreement and the

Second SCL Agreement, Government shall pay to the

Company the Company’s project management cost. The

amount of the project management cost is HK$7,893

million and will be paid by Government to the Company

on a quarterly basis;

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the Third SCL Agreement and in consideration of the

Company executing or procuring the execution of such


obligations under the Third SCL Agreement in relation

to such miscellaneous works (if any), Government shall

pay to the Company an amount to be agreed between

the Company and Government as being the project

management fee payable to the Company for designing

and constructing such miscellaneous works;

• Government shall bear certain “Third Party Costs”, any

“Interface Works Costs” and any “Direct Costs” (each as

defined in the Third SCL Agreement);

• Government shall bear land acquisition, clearance and

related costs and those costs which are incurred by the

Lands Department in connection with the Shatin to

Central Link project;

• the maximum aggregate amount payable by

Government to the Company under the Third SCL

Agreement is limited to HK$3,000 million per annum and

a total in aggregate of HK$15,000 million;

• the maximum aggregate amount payable by the

Company to Government under the Third SCL

Agreement in relation to its contribution to certain

railway works under the Third SCL Agreement is limited

to HK$4,000 million per annum and a total in aggregate

of HK$15,000 million;

• the Company’s total liability to Government under the

First SCL Agreement, the Second SCL Agreement and

the Third SCL Agreement, except in respect of death

or personal injury caused by the negligence of the

Company, is limited to the aggregate fees that have been

and will be received by the Company from Government

under the First SCL Agreement, the Second SCL

Agreement and the Third SCL Agreement;



under the Third SCL Agreement that were carried out in

the immediately preceding calendar month and, within

three months following the handover of the Shatin to

Central Link project to Government, a final report on

the activities required to be carried out under the Third

SCL Agreement;


works constructed under the Shatin to Central Link

project from the commencement of construction until

the date of handover of those works to Government

and for completing or procuring the completion of any

outstanding works and/or defective works identified prior

to the handover of the works;


a certificate of completion by the Company in respect

of work carried out under any contract with any third

party, the Company shall be responsible for the repair

of any defects in such work that are identified following

the expiry of any defects liability period under the

relevant contract;


– in the case of those activities under the Third SCL





– in the case of those activities under the Third SCL





– in the case of those activities under the Third

SCL Agreement that relate to the carrying out of





workmanlike construction contractor; and




steps to procure that all necessary licences and

consents, required in connection with the design,

construction and operation of the Shatin to Central Link

are given or granted.

MTR Corporation160

B1 Entrustment Agreement for Design and Site Investigation in relation to the Express Rail Link The Entrustment Agreement for Design and Site Investigation

in relation to the Express Rail Link (the “First XRL Agreement”)

was entered into on 24 November 2008 between the

Company and the Secretary for Transport and Housing for

and on behalf of Government.

The First XRL Agreement contains provisions for the design of

and site investigation and procurement activities in relation

to the proposed Express Rail Link, including in relation to:

• Government’s obligation to pay the Company, up to

a maximum aggregate amount of HK$1,500 million,

in respect of certain costs incurred by the Company

pursuant to the First XRL Agreement, including the

Company’s in-house design costs and certain on-costs,

preliminary costs and recruited staff costs;

• Government’s obligation to bear and finance the total

cost of the design and site investigation activities under

the First XRL Agreement (subject to the limit noted

above in respect of payments to the Company) and

arrangements for the payment of these costs directly

by Government;

• the Company’s obligation to carry out or procure the

carrying out of the design and site investigation activities

in relation to the proposed Express Rail Link;

• the limitation of the Company’s liability to Government

under the First XRL Agreement, except in respect of

death or personal injury caused by the negligence of the

Company, to HK$700 million; and

• should the railway scheme for the Express Rail Link be

authorised under the Railways Ordinance (Cap. 519

of the Laws of Hong Kong), the execution of a further

agreement by Government and the Company setting

out each of their rights, obligations, duties and powers

with respect to the financing, construction, completion,

testing, commissioning and putting into service the

works necessary for the construction and operation of the

Express Rail Link.

B2 Entrustment Agreement for Construction, Testing and Commissioning of the Express Rail Link The Entrustment Agreement for the Construction and

Commissioning of the Express Rail Link was entered

into on 26 January 2010 between the Company and the

Secretary for Transport and Housing for and on behalf of

Government (the “Second XRL Agreement”).

The scheme in respect of the Express Rail Link was first

gazetted under the Railways Ordinance (Cap. 519 of the Laws

of Hong Kong) on 28 November 2008, with amendments

and corrections gazetted on 30 April 2009. The scheme,

as amended with such minor modifications as deemed

necessary, was authorised by the Chief Executive in Council

on 20 October 2009 and funding support approved by the

Finance Committee on 16 January 2010.

The Second XRL Agreement contains the following provisions:

• in consideration of the Company executing or

procuring the execution of certain entrustment

activities as set out in the Second XRL Agreement and

carrying out its other obligations under the Second XRL

Agreement and the First XRL Agreement, Government

shall pay to the Company HK$4,590 million (further

details relating to the amendments to this provision

are set out in the section below headed “The Third

Agreement in Relation to the Express Rail Link”), to

be paid in cash quarterly in advance on a scheduled

basis as such sum may be varied in accordance with

the Second XRL Agreement, subject to the maximum

payment limits stated in the Second XRL Agreement

(being HK$2,000 million annually and HK$10,000

million in total) (the “Maximum Payment Limits”);








the Second XRL Agreement and in consideration of the

Company executing or procuring the execution of the


obligations under the Second XRL Agreement in relation

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to the miscellaneous works (if any), Government shall

pay to the Company an amount equal to an agreed

fixed percentage of third party costs attributable to the

miscellaneous works from time to time subject to the

Maximum Payment Limits;



under the Second XRL Agreement that were carried

out in the immediately preceding calendar month and,

within three months following the earlier of handover

of the Express Rail Link project to Government or

termination of the Second XRL Agreement, a final

report on the activities required to be carried out under

the Second XRL Agreement;


works constructed under the Express Rail Link project

from the commencement of construction until the

date of handover of those works to Government

(or to a third party directed by Government) and

for completing or procuring the completion of any

outstanding works and/or defective works identified

prior to the handover of the works;


a certificate of completion by the Company in respect

of work carried out under any contract with any third

party, the Company shall be responsible for the repair

of any defects in such work that are identified following

the expiry of any defects liability period under the

relevant contract;


– in the case of those activities under the Second XRL





– in the case of those activities under the Second XRL





– in the case of those activities under the Second

XRL Agreement that relate to the carrying out of





workmanlike construction contractor;

• Government is required to bear (i) any costs payable to

third parties, (ii) any charges, costs or amounts payable

to any Government department, bureau, agency or body

in relation to the activities to be carried out under the

Second XRL Agreement, (iii) any and all amounts payable

to KCRC as compensation for damage arising as a result of

the Company and/or a third party contractor carrying out

activities under the Second XRL Agreement; and (iv) all

land acquisition, clearance and related costs (including all

amounts arising as a result of any claim for compensation

by any third party) and those costs which are incurred by

the Lands Department in connection with the Express Rail

Link project (further details relating to the amendments

to this provision are set out in the section below headed

“The Third Agreement in Relation to the Express Rail

Link”); and




steps to procure that all necessary licences and consents,

required in connection with the design, construction and

operation of the Express Rail Link are given or granted.

Government had agreed that the Company would proceed

with the construction, testing and commissioning of the

Express Rail Link (pursuant to and on the terms of the Second

XRL Agreement) on the understanding that the Company

would be invited to undertake the operation of the Express

Rail Link under the concession approach.

The Third Agreement in Relation to the Express Rail Link On 30 November 2015, Government and the Company

entered into the deed of agreement relating to the further

funding and completion of the Express Rail Link project (the

“Third XRL Agreement”). The Third XRL Agreement contains

an integrated package of terms and provides that:

(i) Government will bear and finance the project cost up to

HK$84.42 billion;

(ii) if the project cost exceeds HK$84.42 billion, the Company

will bear and finance the portion which exceeds that sum

(if any), except for certain agreed excluded costs;

MTR Corporation162

(iii) the Company will pay a special dividend of HK$4.40 in

aggregate per share in two equal tranches (of HK$2.20

per share, in cash in each tranche);

(iv) certain amendments will be made to the existing

entrustment arrangements entered into in 2010 relating

to the Express Rail Link, including an increase in the

project management fee payable to the Company to

HK$6.34 billion;

(v) Government reserves the right to refer to arbitration, after

commencement of operations on the Express Rail Link,

the question of the Company’s liability for the current

cost overrun (if any); and

(vi) the Third XRL Agreement was subject to (a) the obtaining

of approval of the Company’s independent shareholders

(which was obtained on 1 February 2016) and (b) the

obtaining of approval of the Legislative Council for

Government’s additional funding obligations (which was

obtained on 11 March 2016).

The first tranche of the special dividend of HK$2.20 per share

was distributed on 13 July 2016 and the second tranche, also

of HK$2.20 per share, was distributed on 12 July 2017.

Pursuant to the Third XRL Agreement, certain amendments

have been made to the Second XRL Agreement to reflect

the arrangements contained in the Third XRL Agreement,

including (i) amendments to the arrangements for the

bearing and financing of the project cost; and (ii) an increase

in the project management cost payable to the Company to

an aggregate of HK$6.34 billion (which reflects the estimate

of the Company’s expected internal costs in performing its

obligations in relation to the Express Rail Link project).

C1 Maintenance Agreement for the Automated People Mover System at the Hong Kong International Airport On 5 July 2013, the Company entered into a Maintenance

Contract with the AA for the renewal of the then expired

maintenance agreement for the maintenance of the

Automated People Mover system at the Hong Kong

International Airport (the “System”) for a seven year period

(the “Maintenance Contract”), effective from 6 July 2013. It is

expected that the highest amount per year receivable from

the AA under the Maintenance Contract will be no more than

HK$85 million.

The Maintenance Contract contains provisions relating to the

operation and maintenance by the Company of the System

and the carrying out by the Company of certain specified

services in respect of the System, they include the following:

• provisions stating that the duration of the Maintenance

Contract shall be seven years from 6 July 2013 up to and

including 5 July 2020;

• provisions relating to the performance of scheduled

maintenance works and overhaul of the System by

the Company;

• provisions relating to monitoring the System for any

breakdown and the Company providing repair services

where necessary;

• provisions relating to the standards to which the

Company must operate the System;

• provisions relating to the carrying out by the Company

(as additional services), in certain circumstances, of

upgrade work on the System; and

• provisions relating to the operations of and

maintenance for the extension of the System to the

Midfield Concourse.

C2 Subcontractor Warranty to the AA On 18 May 2018, the Company provided a sub-contractor

warranty to the AA as a result of obtaining a subcontract from

Niigata Transys Co., Ltd. (“NTS”) for the modification works of

the existing System for a seven year period, effective from

25 September 2017 (the “Subcontract”). It is expected that

the highest amount per year receivable from NTS will be no

more than HK$60 million.

The Subcontract contains provisions covering the provision

and modification of the power distribution, communication

and control subsystems in respect of the System, which

includes the following:

• modification of the existing System for its extension to

the new Automated People Mover Interchange Station;

• provision of related electrical and mechanical systems,

including power distribution system, telecommunication

systems, platform screen door and maintenance

equipment; and

• relocation of existing maintenance equipment to the new

Automated People Mover depot.

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D Project Agreement for the Financing, Design, Construction and Operation of the West Island LineThe Project Agreement for the Financing, Design,

Construction and Operation of the West Island Line (the

“WIL Project Agreement”) was entered into on 13 July 2009

between the Company and the Secretary for Transport and

Housing for and on behalf of Government.

The WIL Project Agreement contains provisions for the

financing of and the carrying out, or procuring the carrying

out, of the design, construction, completion, testing and

commissioning by the Company of the railway works

required in order to bring the West Island Line into operation

in accordance with the MTR Ordinance, the Operating

Agreement between the Company and the Secretary for

Transport and Housing for and on behalf of Government

dated 9 August 2007 and the WIL Project Agreement. The

West Island Line will be owned, operated and maintained

by the Company for its own account for the period of the

Company’s railway franchise. The final payment certificate

was issued on 28 June 2019.

The WIL Project Agreement includes provisions in relation to:

• payment by Government of HK$12,252 million to the

Company in consideration of the Company’s obligations

under the WIL Project Agreement, such sum constituting

funding support from Government for the Company to

implement the West Island Line project;

• within 24 months of commercial operations commencing

on the West Island Line on a revenue earning basis and

providing scheduled transport for the public (which

period was extended to no later than 30 June 2018 by

a supplemental agreement between the Company

and Government dated 23 December 2016, further

extended for a period ended on or before 31 March

2019 by a second supplemental agreement between

the Company and Government dated 29 June 2018, and

further extended for a period ended on 30 June 2019 by

a third supplemental agreement between the Company

and Government dated 29 March 2019), payment

by the Company to Government of any “Repayment

Amounts” for any over-estimation of certain capital

expenditure, price escalation costs, land costs and the

amount of contingency in relation to the railway works

and reprovisioning, remedial and improvement works

(together with interest);

• the design, construction and completion of the

associated reprovisioning, remedial and improvement

works (the cost of which shall be the responsibility

of the Company) and the associated essential public

infrastructure works (the cost of which shall be the

responsibility of Government);

• the Company’s responsibility for costs relating to land

acquisition, clearance and related costs arising from the

implementation of the West Island Line project (save

for costs arising from certain claims for compensation

by third parties) and all costs, expenses and other

amounts incurred or paid by the Lands Department

pursuant to the involvement of the Lands Department

in connection with the implementation of the West

Island Line project; and

• the Company carrying out measures specified in the

environmental impact assessment and the environmental

permit issued by Government to the Company in relation

to the West Island Line on 12 January 2009.

III Continuing Connected Transactions relating to the Operation of the High Speed Rail (formerly known as the Express Rail Link)

The following disclosures, in paragraphs A and B below

(together, the “Continuing Connected Transactions relating

to the Operation of the High Speed Rail”), are made in

accordance with the conditions of the Waiver, the Merger-

related Waiver and Rule 14A.71 of the Listing Rules.

A Amendment Operating Agreement On 23 August 2018, the Company and the Secretary for

Transport and Housing, for and on behalf of Government,

entered into the Amendment Operating Agreement (the

“AOA”) to amend and supplement the Integrated Operating

Agreement dated 9 August 2007 (as described in paragraph

D of the section headed “Additional Information in respect of

the Rail Merger” on pages 173 to 174), as amended (“Existing

Integrated Operating Agreement”), in order to prescribe the

operational requirements that will apply to the High Speed

Rail. The intent and effect of the AOA is that the operational

requirements that are applicable to the existing railway

network will apply in substantially the same manner to the

High Speed Rail, save where any amendments are necessary

to reflect the particular characteristics of, and arrangements

for, the High Speed Rail.

MTR Corporation164

The AOA is an “operating agreement” for the purposes of the

MTR Ordinance, forms part of the legal and regulatory regime

for the operation of railways in Hong Kong and is required for

the purposes of the MTR Ordinance so that the High Speed

Rail is properly regulated under the MTR Ordinance.

Principal Terms of the AOA are as follows:

The terms of the AOA are based substantially on the terms

of the Existing Integrated Operating Agreement. The AOA

has taken effect on 23 September 2018 (the “Commercial

Operation Date (High Speed Rail)”) and will expire at the same

time as the Supplemental Service Concession Agreement

(the “SSCA”) entered into between the Company and KCRC

on 23 August 2018.

Certain principal terms of the AOA that are specific to the

High Speed Rail include:

• obligations on the Company to maintain specific

performance requirements in relation to train service

delivery, ticket machine reliability, ticket-gate reliability

and escalators and passenger lifts reliability;

• obligations on the Company to publish specific

customer services pledges in relation to train service

delivery, ticket machine reliability, ticket-gate reliability,

escalators and passenger lifts reliability, temperature

and ventilation levels, railway cleanliness (relating only

to the Company’s High Speed Rail trains) and passenger

enquiry response time;

• obligations in relation to the carrying out of the

maintenance of the Company’s High Speed Rail trains

outside Hong Kong;

• obligations on the Company to carry out design checks

and tests to verify that the Mainland operator’s High

Speed Rail trains are compatible with the Company’s

infrastructure and can run on the High Speed Rail safely;

• establishing procedures with the Mainland operator for

approving the Mainland operator’s trains to run on the

High Speed Rail safely and for informing Government of

the modification of any such trains;

• developing and maintaining a training qualification

system for drivers of High Speed Rail trains;

• facilitating the carrying out of inspections by the railway

inspector, including liaising with the Mainland operator

for this purpose, where necessary;

• security obligations in relation to maintaining the

integrity and security of the boundaries of the Mainland

Port Area and the Cross-Boundary Restricted Area; and

• mechanisms and Government approval procedures

for setting fares for High Speed Rail train journeys,

including that:

(i) prior to the Commercial Operation Date (High Speed

Rail), the Company will seek prior written consent

from Government before setting the fares for the

various available High Speed Rail ticket types; and

(ii) thereafter, fares cannot be adjusted, introduced or

withdrawn without the prior consent of Government.

B Supplemental Service Concession Agreement On 23 August 2018, the Company and KCRC entered into

the SSCA to supplement the Service Concession Agreement

dated 9 August 2007 (as described in paragraph B of the

section headed “Additional Information in respect of the

Rail Merger” on pages 172 to 173) (the “Existing Service

Concession Agreement”) in order for KCRC to grant a

concession to the Company in respect of the High Speed Rail

and to prescribe the operational and financial requirements

that will apply to the High Speed Rail. The intent and effect

of the SSCA is that the operational requirements that are

applicable to the Company’s operation of the existing KCRC

railway system will apply in substantially the same manner

to the High Speed Rail, save where any amendments

are necessary to reflect the particular characteristics of,

and arrangements for, the High Speed Rail. The financial

provisions in the SSCA have been designed to reflect the

provisions of the Existing Integrated Operating Agreement

that relate to new concession projects, such as the High

Speed Rail subject as set out below.

The SSCA is a “service concession agreement” for the

purposes of the MTR Ordinance, forms part of the legal

and regulatory regime for the operation of railways in

Hong Kong and is required for the purposes of the MTR

Ordinance so that the High Speed Rail is properly regulated

under the MTR Ordinance.

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Principal Terms of the SSCA

The terms of the SSCA are based substantially on the terms

of the Existing Service Concession Agreement. The operating

period with respect to the High Speed Rail has commenced

on the Commercial Operation Date (High Speed Rail) and will

terminate automatically on the earlier of:

(i) a revocation of the Company’s franchise under the

MTR Ordinance in whole or in respect of the High

Speed Rail; and

(ii) the date falling immediately before the tenth

anniversary of the Commercial Operation Date (High

Speed Rail), but may be extended subject to further

negotiation between the Company and KCRC in

accordance with the mechanism set out in the SSCA,

in which case it shall terminate on such other date

as is agreed between the Company and KCRC (the

“Concession Period (High Speed Rail)”).

Certain principal terms of the SSCA that are specific to the

High Speed Rail include:

• Additional concession payments for the High Speed Rail

(i) General

The additional concession payments to be made by

the Company to KCRC and by KCRC to the Company

in respect of the High Speed Rail (described below)

have been designed to reflect the requirements

under the Existing Integrated Operating Agreement,

inter alia, for the Company to retain 10% of the

currently expected positive discounted net cash flow

from the operation of the High Speed Rail (being

discounted at a discount rate which reflects the

Company’s commercial rate of return in relation to

the High Speed Rail).

The SSCA provides for the fixed annual payments

and variable annual payments structure for the

additional concession payments, to reflect the

current concession payments structure for the

existing KCRC system under the Existing Service

Concession Agreement.

The additional concession payments for the

High Speed Rail are in addition to, and do not

replace, the payments made in respect of the

existing KCRC system under the Existing Service


(ii) Variable annual payments

The variable annual payments (being payments

by the Company to KCRC) will be calculated in the

same manner prescribed under the Existing Service

Concession Agreement whereby the Company pays

to KCRC, for each financial year, a certain percentage

of the revenue generated from the KCRC system

(being 35% for revenues generated from the KCRC

system that are beyond the first HK$7.5 billion).

For the purposes of calculating the variable annual

payments, the revenue generated from the KCRC

system shall include the actual revenue from the High

Speed Rail fares received or retained by the Company

and revenue derived from businesses related to

the High Speed Rail which may include, without

limitation, advertising, telecommunications, duty free

and kiosk rental.

(iii) Fixed annual payments for the High Speed Rail

In light of the variable annual payments described in

paragraph (ii) above and in order for the Company

to be able to retain 10% of the currently expected

positive discounted net cash flow from the operation

of the High Speed Rail as described above, the fixed

annual payments shall comprise payments from

KCRC to the Company which, in aggregate, over the

Concession Period (High Speed Rail), will be equal to

HK$7,965 million.

These fixed annual payments shall be without

prejudice to the Company’s obligation to pay the

fixed annual payments of HK$750 million each

financial year to KCRC under the Existing Service


• Revenue-related arrangements

In addition, the SSCA contains the following revenue-

related arrangements:

(i) Patronage adjustment

In respect of actual deviations from the current

patronage projections for the High Speed Rail:

(a) any excess or shortfall in actual patronage of

up to 15% in relation to the currently projected

patronage for the High Speed Rail will be borne

by the Company; and

MTR Corporation166

(b) any excess or shortfall in actual patronage

greater than 15% in relation to the currently

projected patronage for the High Speed Rail

will be borne between the Company and KCRC

in the proportions of 30% by the Company and

70% by KCRC.

(ii) Incremental revenue adjustment

In respect of actual deviations from the currently

projected patronage for the Company’s existing cross-

boundary services to and from Lo Wu and Lok Ma

Chau, and the existing intercity service, the Company

may receive two payments from KCRC (in respect

of the period from and including the Commercial

Operation Date (High Speed Rail) up to and including

31 December 2023 and in respect of the period from

and including 1 January 2024 up to and including the

day falling immediately before the tenth anniversary

of the Commercial Operation Date (High Speed Rail),

respectively) and which will be capped at HK$500

million and HK$1,000 million, respectively.

(iii) Mainland discount programme loss

In respect of revenue loss resulting from the

Mainland Student Ticket Discount and the

Mainland Disabled Military/Police Officer Discount

programmes adopted by the Mainland operator, the

Company will receive reimbursement payments from

KCRC on an annual basis.

KCRC and the Company will also discuss in good

faith similar reimbursement arrangements should

the Mainland operator introduce any other discount

programmes in future.

(iv) Service fees subsidy

In respect of the proportion of the service fee charged

in respect of tickets sold at West Kowloon Station

for journeys originating from and terminating at any

railway station in the Mainland which Government

has directed should be borne by the Company, the

Company will receive reimbursement payments from

KCRC on an annual basis.

• Pre-operating costs reimbursements

In addition, KCRC shall reimburse the Company for

the pre-operating costs that are agreed between

the Company and KCRC, being costs and expenses

reasonably incurred by the Company prior to the

Commercial Operation Date (High Speed Rail) that satisfy

all of the following criteria:

(i) that directly resulted from the planning and

commencement of the operation of the relevant High

Speed Rail assets;

(ii) that have not already been paid, and will not be paid

or payable, by Government to the Company under

any relevant agreement or which the Company and

Government otherwise agree in writing should be

treated as a pre-operating cost;

(iii) that are not covered in any of the payments to be

made by KCRC to the Company under the SSCA; and

(iv) that fall within certain other types of agreed costs

and expenses in connection with the operation of

the High Speed Rail (including, mobilisation activities

in preparation for the opening of the High Speed

Rail and trial operations prior to the opening of the

High Speed Rail, and other items as may be agreed

between KCRC and the Company).

• Equalisation payment

If the franchise is revoked by Government prior to

31 December 2023, KCRC is required to make a payment

to the Company of an amount that is equivalent to the

aggregate fixed annual payment payable by KCRC over

the ten year life of the concession, reduced pro rata to

take account of the time at which termination occurs,

and less any amounts of the fixed annual payment

already paid to the Company. The intention of this

equalisation payment is to ensure that the Company is

partly protected in the event of early termination of the

concession in respect of the High Speed Rail.

• High Speed Rail services

The Company is obliged to operate the High Speed Rail

during the Concession Period (High Speed Rail) to the

standards prescribed in the MTR Ordinance and the

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Existing Operating Agreement (subject as otherwise

stated herein). The Company is not regarded as having

failed to meet a requirement under the MTR Ordinance

or the Existing Integrated Operating Agreement if the

failure has resulted from anything done or omitted to be

done by the Mainland operator, any Mainland authority

or persons directly under their control.

• Return requirements

If the Concession Period (High Speed Rail) expires

or is terminated, the Company shall, at no cost to

KCRC, redeliver possession of the High Speed Rail

concession property.

IV Continuing Connected Transactions relating to the Operation of the First Phase of the Tuen Ma Line

The following disclosures, in paragraphs A and B below

(together, the “Continuing Connected Transactions relating

to the Operation of the first phase of the Tuen Ma Line”), are

made in accordance with the conditions of the Waiver, the

Merger-related Waiver and Rule 14A.71 of the Listing Rules.

A Amendment Operating Agreement and Supplemental Operating Agreement On 11 February 2020, the Company and the Secretary for


entered into the Amendment Operating Agreement

(“TML1 AOA”) and the Company and the Commissioner for

Transport, for and on behalf of Government, entered into

the Supplemental Operating Agreement (“TML1 SOA”) to

amend and supplement, respectively, the Existing Integrated

Operating Agreement in order to prescribe the operational

requirements, such as service standards, that will apply to the

first phase of the Tuen Ma Line (“TML1”) which shall extend

the existing Ma On Shan Railway from Tai Wai to Kai Tak with

two new stations at Hin Keng and Kai Tak, and an interchange

station at Diamond Hill. The intent and effect of the TML1

AOA and the TML1 SOA together is that the operational

requirements that are applicable to the existing railway

network will apply in substantially the same manner to TML1.

The TML1 AOA and TML1 SOA are each an “operating

agreement” for the purposes of the MTR Ordinance, form

part of the legal and regulatory regime for the operation of

railways in Hong Kong and are required for the purposes of

the MTR Ordinance so that TML1 is properly regulated under

the MTR Ordinance.

The principal terms of the TML1 AOA and the TML1 SOA have

the effect of bringing TML1 within the legal and regulatory

regime for the operation of railways in Hong Kong contained

in the Existing Integrated Operating Agreement, as explained

above. The amendments under the TML1 AOA and the TML1

SOA took effect on 14 February 2020.

B Supplemental Service Concession Agreement On 11 February 2020, the Company and KCRC entered into

the Supplemental Service Concession Agreement No. 2

(“TML1 SSCA”) relating to TML1, to supplement the Existing

Service Concession Agreement in order for KCRC to grant

a concession to the Company in respect of TML1 and to

prescribe the operational and financial requirements that

will apply to TML1. The intent and effect of the TML1 SSCA is

that the operational requirements that are applicable to the

Company’s operation of the existing KCRC railway system

will apply in substantially the same manner to TML1, save

where any amendments are necessary to reflect the particular

characteristics of, and arrangements for, TML1. The financial

provisions in the TML1 SSCA have been designed to reflect

the principles contained in the Existing Integrated Operating

Agreement that relate to new concession projects, such as

TML1 (as referred to in paragraph A above of this section)

other than as set out below.

The TML1 SSCA is a “service concession agreement” for the

purposes of the MTR Ordinance, forming part of the legal and

regulatory regime for the operation of railways in Hong Kong,

and is required for the purposes of the MTR Ordinance so that

TML1 is properly regulated under the MTR Ordinance.

Principal Terms of the TML1 SSCA

The terms of the TML1 SSCA are based substantially on the

terms of the Existing Service Concession Agreement, as

explained above. The TML1 SSCA was made on 11 February

2020 and the term of the service concession and licence

MTR Corporation168

granted by KCRC to the Company pursuant to the terms

of the TML1 SSCA and the commercial operation of TML1

commenced on 14 February 2020 (the “New Project Effective

Date (TML1)”), which will terminate automatically on and

from the earlier of (being the “Termination Date (TML1)”):

(i) the effective date of the revocation of the franchise

pursuant to the MTR Ordinance as it relates to the

KCRC railway;

(ii) the effective date of the withdrawal or revocation of

the permission by the Director of Lands pursuant to

the vesting deed entered into between KCRC and

Government as well as the revocation of the franchise

pursuant to the MTR Ordinance as it relates to TML1;

(iii) the first date of commissioning and commercial

operation of the entire Tuen Ma Line (“TML2”) to be

designated by Government under a new supplemental

service concession agreement for TML2 (which shall

supersede and replace the TML1 SSCA); and

(iv) the day falling immediately before the second

anniversary of the New Project Effective Date (TML1),

or such later date as each of the Company, KCRC and

Government may agree in a written agreement by no

later than the date falling one month prior to the second

anniversary of the New Project Effective Date (TML1)

or prior to the last extended date (where applicable)

(“Natural Expiry Date (TML1)”).

Certain principal terms of the TML1 SSCA that are specific to

TML1 include:

• Concession payments

(i) Variable annual payments

The variable annual payments (being payments

by the Company to KCRC) will be calculated in the

same manner prescribed under the Existing Service

Concession Agreement whereby the Company pays

to KCRC, for each financial year, a certain percentage

of the revenue generated from the KCRC system

(being 35% for revenues generated from the KCRC

system that are beyond the first HK$7.5 billion).

For the purposes of calculating the variable annual

payments, the revenue generated from the KCRC

system shall include the actual revenue from the

TML1 fares received or retained by the Company

and revenue derived from businesses related

to TML1 which may include, without limitation,

telecommunications and kiosk rental.

(ii) Fixed annual payments for TML1

In light of the variable annual payments described

above and in order for the Company to be able to

earn a commercial return as described above, the

fixed annual payments for TML1 shall comprise

payments from KCRC to the Company which, in

aggregate over the period commencing on the

New Project Effective Date (TML1) and ending

on the day prior to the Termination Date (TML1)

(“Concession Period (TML1)”) and assuming that

the Concession Period (TML1) terminates on the

Natural Expiry Date (TML1), will be equal to HK$465

million. These fixed annual payments shall be without

prejudice to the Company’s obligation to pay the

fixed annual payments of HK$750 million each

financial year to KCRC under the Existing Service


• A new supplemental service concession agreement

for TML2

On and from the date of the TML1 SSCA, to and including

the date that is four months before the Natural Expiry

Date (TML1) (prior to any extension or otherwise after

such extension(s) as agreed in writing by the Company,

KCRC and Government for the purposes of this end date),

Government, the Company and KCRC shall commence

exclusive negotiations in good faith with a view to

agreeing the terms of a supplemental service concession

agreement for TML2 which shall, in accordance with the

Existing Integrated Operating Agreement, enable the

Company to earn a commercial rate of return from its

operation of TML2 (and that new supplemental service

concession agreement for TML2 is intended to replace

the TML1 SSCA).

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• Return requirements

If the Concession Period (TML1) expires or is terminated,

and no supplemental service concession agreement

is entered into for TML2, the Company shall, at

no cost to KCRC, redeliver possession of the TML1

concession property.

V Non-Governmental Continuing Connected Transaction

The following disclosure (the “Non-Governmental Continuing

Connected Transaction”) is made in accordance with Rule

14A.71 of the Listing Rules.

Contract 903 between the Company and LCAL relating to certain works on the South Island Line (East) As explained above, LCAL is a “connected person” of

the Company within the meaning of Chapter 14A of the

Listing Rules. Contract 903 (as defined below) is therefore a

“continuing connected transaction” within the meaning of

Rule 14A.31 of the Listing Rules.

On 17 May 2011, the Company and LCAL entered into

Contract 903 (as amended by a supplemental agreement on

14 November 2014) (the “Contract 903”) for the construction

of certain works relating to the Aberdeen Channel Bridge,

Wong Chuk Hang Station and Ocean Park Station in respect

of the South Island Line (East) (the “Contract 903 Works”).

Contract 903 is in substantially the same form as the

Company’s standard conditions of contract for target cost

construction and contains the following provisions:

• the principal obligation of LCAL under Contract 903 is the

construction of the Contract 903 Works;

• LCAL shall indemnify the Company against any loss or

expense sustained by the Company and against all losses

and claims in respect of death or injuries or damage to

any person or property whatsoever which may arise out

of or in consequence of the execution of the Contract

903 Works and against all claims, proceedings, damages,

costs, charges and expenses whatsoever in respect of or

in relation thereto, except for compensation or damages

related to the permanent use or occupation of land by

the Contract 903 Works, or the right of the Company

to execute the Contract 903 Works on any part of the

land, or on account of any negligence by the Company,

its agents, servants or other contractors, not being

employed by LCAL;

• LCAL shall indemnify the Company against all damages

and compensation and against all claims, demands,

proceedings, costs, charges and expenses whatsoever

in respect of any damages or compensation payable

at law in respect of or in consequence of any accident,

injury or illness to any workman or other person in the

employment of LCAL or its sub-contractors or suppliers

arising out of and in the course of such employment;

• LCAL shall effect and maintain insurance with a limit

of not less than HK$200 million in relation to certain of

its liabilities;

• a bond issued by Chartis Insurance Hong Kong Limited

has been provided to the Company in respect of the

obligations of LCAL under Contract 903;

• LCAL’s liability to indemnify the Company is reduced

proportionally to the extent that any act or neglect of the

Company, the Engineer or any other person employed by

the Company in connection with the Contract 903 Works,

their respective agents, employees or representatives,

may have contributed to the relevant death, illness, or

damage. The total liability of LCAL to the Company for all

damages (liquidated damages and general) for delay shall

not exceed 10% of the target cost plus fees as calculated

under Contract 903;

• the total amount payable by the Company to LCAL under

Contract 903 includes costs for the Contract 903 Works

and fees to LCAL. From time to time the scope of the

Contract 903 Works may vary and the Company will be

obliged to revise the fees payable to LCAL in accordance

with the terms of the Contract;

• the Company is obliged to pay the costs for the Contract

903 Works to LCAL on a scheduled basis set out in

Contract 903. If the final total cost of the Contract 903

Works exceeds or is less than the target cost for the

Works, the deficit or, as the case may be, the excess will

be borne by or, as the case may be, distributed to the

Company and LCAL on a basis calculated in accordance

with Contract 903;

MTR Corporation170

• the maximum aggregate amount payable annually

by the Company under Contract 903 is approximately

HK$1,400 million. As payments by the Company to LCAL

are paid on a scheduled basis as set out in Contract

903, the maximum aggregate annual amount is set

by reference to the highest amount payable by the

Company in any given year under such schedule;

• the Company is obliged to effect “Contractor’s All Risks”

and “Third Party Liability” insurance with a third party

liability limit of not less than HK$700 million. In addition,

LCAL has agreed to separately purchase additional cover

for “Third Party Liability” insurance in the amount of

HK$3,638 million; and

• the Company may at any time, by giving 30 days’ notice

in writing to LCAL, terminate Contract 903 but without

prejudice to any claims by the Company for breach

of contract.

In relation to the Merger-related Continuing Connected

Transactions, the Non Merger-related Continuing

Connected Transactions, the Continuing Connected

Transactions relating to the Operation of the High Speed

Rail, the Continuing Connected Transactions relating to

the Operation of the first phase of the Tuen Ma Line and

the Non-Governmental Continuing Connected Transaction

(collectively “Transactions”) and in accordance with (i) in

the case of the Merger-related Continuing Connected

Transactions, paragraph B(I)(i) of the Merger-related Waiver;

(ii) in the case of the Non Merger-related Continuing

Connected Transactions, paragraph B(I)(iii)(a) of the Waiver;

(iii) in the case of the Continuing Connected Transactions

relating to the Operation of the High Speed Rail, paragraph

B(I)(i) of the Merger-related Waiver and paragraph B(I)(iii)(a)

of the Waiver; (iv) in the case of the Continuing Connected

Transactions relating to the Operation of the first phase of the

Tuen Ma Line, paragraph B(I)(i) of the Merger-related Waiver

and paragraph B(I)(iii)(a) of the Waiver; and (v) in the case of

the Non-Governmental Continuing Connected Transaction,

Rule 14A.55 of the Listing Rules, the Company confirms that

the Independent Non-executive Directors of the Company

have reviewed and confirmed that each of the Transactions

was entered into:

(1) in the ordinary and usual course of business (within the

meaning of the Listing Rules) of the Group;

(2) on normal commercial terms or better (within the

meaning of the Listing Rules); and

(3) according to the agreement governing them on terms

that are fair and reasonable and in the interests of the

Company’s shareholders as a whole.

The Company has engaged the auditors of the Company

to report on the Transactions in accordance with Hong

Kong Standard on Assurance Engagements 3000 (Revised)

“Assurance Engagements Other Than Audits or Reviews

of Historical Financial Information” and with reference to

Practice Note 740 “Auditor’s Letter on Continuing Connected

Transactions under the Hong Kong Listing Rules” issued by

the Hong Kong Institute of Certified Public Accountants.

In accordance with (i) in the case of the Merger-related

Continuing Connected Transactions, paragraph B(I)(ii) of the

Merger-related Waiver; (ii) in the case of the Non

Merger-related Continuing Connected Transactions,

paragraph B(I)(iii)(b) of the Waiver; (iii) in the case of the

Continuing Connected Transactions relating to the Operation

of the High Speed Rail, paragraph B(I)(ii) of the Merger-related

Waiver and paragraph B(I)(iii)(b) of the Waiver; (iv) in the case

of the Continuing Connected Transactions relating to the

Operation of the first phase of the Tuen Ma Line, paragraph

B(I)(ii) of the Merger-related Waiver and paragraph B(I)(iii)(b)

of the Waiver; and (v) in the case of the Non-Governmental

Continuing Connected Transaction, Rule 14A.56 of the

Listing Rules, the auditors have provided a letter to the Board

confirming that:

(a) nothing has come to their attention that causes them

to believe that any of the Transactions has not been

approved by the Board;

(b) nothing has come to their attention that causes them to

believe that any of the Transactions was not entered into,

in all material respects, in accordance with the relevant

agreements governing such transactions; and

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in the case of the Non-Governmental Continuing

Connected Transaction, in addition, that:

(c) for transactions involving the provision of goods or

services by the Group, nothing has come to their

attention that causes them to believe that such

transactions were not, in all material respects, in

accordance with the pricing policies of the Group; and

(d) with respect to the aggregate amount of each of such

transactions, nothing has come to their attention

that causes them to believe that such transactions

have exceeded the relevant annual caps as set by the

Company in respect of each of such transactions.

Additional Information in respect of the Rail Merger The Rail Merger consisted of a number of separate

agreements, each of which was detailed in the circular

issued by the Company on 3 September 2007 in

connection with the Rail Merger, and which together

formed a complete package deal which was approved

by the independent shareholders of the Company at an

Extraordinary General Meeting held on 9 October 2007.

The information set out at paragraph A below describes

the payment framework adopted in respect of the Rail

Merger and paragraphs B to E below set out, summaries

of the various agreements entered into by the Company

in respect of the Rail Merger in addition to those

agreements disclosed above under the heading “Merger-

related Continuing Connected Transactions”.

A Payments in connection with Merger-related AgreementsIn connection with the Rail Merger, the following initial

payments were made by the Company to KCRC on

2 December 2007 (being the Merger Date):

• an upfront payment of HK$4.25 billion, payable under

the Service Concession Agreement (as described in

paragraph B below), being the upfront fee for the

right to operate the Service Concession (as defined

in paragraph B below) and the consideration for the

purchased rail assets; and

• an upfront payment of HK$7.79 billion payable under

the Merger Framework Agreement (as described on

pages 155 to 156) in consideration for the execution

of the Property Package Agreements (as described on

pages 156 to 157 and in paragraph E below) and the

sale of the shares in the subsidiaries of KCRC

(the “KCRC Subsidiaries”) that were transferred to the

Company under the Sale and Purchase Agreement

which was entered into on 9 August 2007 between the

Company and KCRC.

In addition to the initial payments above, the Company

is also required to make the following payments to KCRC

going forward:

• fixed annual payments of HK$750 million payable

under the Service Concession Agreement, for the right

to use and operate the concession property for the

operation of the service concession, in arrears on the

day immediately preceding each anniversary of the

Merger Date which falls during the concession period in

respect of the 12-month period up to and including the

date on which such payment falls due; and

• variable annual payments payable under the Service

Concession Agreement, for the right to use and

operate the concession property for the operation of

the service concession, in each case, calculated on a

tiered basis by reference to the amount of revenue

from the KCRC system (as determined in accordance

with the Service Concession Agreement) for each

financial year of the Company. No variable annual

payment is payable in respect of the first 36 months

following the Merger Date.

As a complete package deal, other than the payment

elements described above and unless stated otherwise in

the relevant paragraph below, no specific allocation was

made between the various elements of the Rail Merger.

B Service Concession Agreement The Service Concession Agreement was entered into on

9 August 2007 between the Company and KCRC.

The Service Concession Agreement contains provisions in

relation to the grant and operation of a service concession

and licence granted by KCRC to the Company (the

“Service Concession”), including in relation to:

• the grant of the Service Concession to the Company

to access, use and operate the concession property

(other than KCRC railway land referred to immediately

below) to certain specified standards;

• the grant of a licence to access and use certain KCRC

railway land;

MTR Corporation172

• the term (being an initial period of 50 years from the

Merger Date) of the Service Concession and redelivery

of the KCRC system upon expiry or termination of the

concession period. The Service Concession will end if

the Company’s franchise relating to the KCRC railway

is revoked;

• the payments of an upfront payment of HK$4.25

billion and fixed annual payments and variable annual

payments (as described in paragraph A above);

• KCRC remaining the legal and beneficial owner of

the concession property as at the Merger Date and

the Company being the legal and beneficial owner of

certain future concession property (the “Additional

Concession Property”);

• the regime for compensation payable by KCRC to

the Company if Additional Concession Property is

returned to KCRC at the end of the concession period;

• the rights and restrictions of the Company and KCRC

in relation to the concession property; and

• subject to certain conditions, the Company bearing

all risks, liabilities and/or costs whatsoever associated

with or arising from the concession property and

the land on which any of the concession property is

located during the concession period.

On 23 August 2018, the Company and KCRC entered

into the SSCA in order for KCRC to grant a concession

to the Company in respect of the High Speed Rail and

to prescribe the operational and financial requirements

that will apply to the High Speed Rail. Further details

are set out in the section above headed “III Continuing

Connected Transactions relating to the Operation of

the High Speed Rail (formerly known as the

Express Rail Link)” in the section headed “Continuing

Connected Transactions”.

On 11 February 2020, the Company and KCRC entered

into the TML1 SSCA in order for KCRC to grant a

concession to the Company in respect of the first phase

of the Tuen Ma Line of the Shatin to Central Link and to

prescribe the operational and financial requirements

that will apply to TML1. Further details are set out in

the section above headed “IV Continuing Connected

Transactions relating to the Operation of the First Phase

of the Tuen Ma Line” in the section headed “Continuing


C Sale and Purchase AgreementThe Sale and Purchase Agreement was entered into on

9 August 2007 between the Company and KCRC.

The Sale and Purchase Agreement provides the terms

pursuant to which the Company acquired certain assets

and contracts (the “Purchased Rail Assets”) from KCRC.

The consideration for the sale of the Purchased Rail

Assets (excluding the shares in the KCRC Subsidiaries)

formed part of the upfront payment of HK$4.25 billion.

The consideration for the sale of the shares in the KCRC

Subsidiaries (which own the Category 1A Properties

referred to at paragraph E below and act as property

managers) formed part of the payment of HK$7.79 billion

for the property package (as described in paragraph A

above and in paragraph E below).

D Operating AgreementThe Operating Agreement was entered into on 9 August

2007 between the Company and the Secretary for

Transport and Housing for and on behalf of Government

as contemplated in the MTR Ordinance.

The Operating Agreement is based on the previous

Operating Agreement which was signed on 30 June

2000. The Operating Agreement differs from the previous

Operating Agreement to provide for, amongst other

things, the nature of the combined MTRC railway and

KCRC railway.

The Operating Agreement includes terms relating to:

• the extension of the Company’s franchise under the

MTR Ordinance;

• the design, construction and maintenance of

the railway;

• passenger services;

• a framework for the award of new projects and the

operation and ownership structure of new railways;

• the adjustment mechanism to be applied to certain of

the Company’s fares; and

• compensation which may be payable under the MTR

Ordinance to the Company in relation to a suspension,

expiry or termination of the franchise.

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Under the Operating Agreement, the fare adjustment

mechanism is subject to review periodically. The first of

such reviews was undertaken in 2013 and the second was

conducted in 2017. The Company and Government agreed

on 16 April 2013 to amend the fare adjustment mechanism.

On 21 March 2017, the Company announced that it and

Government had agreed to maintain the fare adjustment

mechanism formula and direct-drive nature of such formula,

save for certain consequential changes as a result of the

review of the formula having been advanced by one year.

In addition, the wider terms of the Operating Agreement

are subject to review every five years and such a review

was also undertaken in 2013. As a result of such review, the

Company and Government agreed measures in enhancing

communication and liaison on operational arrangements.

On 23 August 2018, the Company and the Secretary for


entered into the AOA to amend and supplement the

Integrated Operating Agreement dated 9 August 2007,

as amended, in order to prescribe the operational

requirements that will apply to the High Speed Rail.

Further details are set out in the section above headed

“III Continuing Connected Transactions relating to the

Operation of the High Speed Rail (formerly known as the

Express Rail Link)” in the section headed “Continuing


On 11 February 2020, the Company and the Secretary

for Transport and Housing, for and on behalf of

Government, entered into the TML1 AOA and the

Company and the Commissioner for Transport, for and

on behalf of Government, entered into the TML1 SOA

to amend and supplement, respectively, the Existing

Integrated Operating Agreement, in order to prescribe

the operational requirements that will apply to the first

phase of the Tuen Ma Line of the Shatin to Central Link.

Further details are set out in the section above headed

“IV Continuing Connected Transactions relating to the

Operation of the First Phase of the Tuen Ma Line” in the

section headed “Continuing Connected Transactions”.

E Additional Property Package Agreements

Category 1A Properties The Category 1A Properties are held by the KCRC

Subsidiaries. Under the terms of the Sale and Purchase

Agreement, the Company acquired from KCRC the shares

in the KCRC Subsidiaries (and thereby indirectly acquired

the “Category1A Properties”).

Category 1B Properties On 9 August 2007, KCRC and the Company entered into

an agreement for sale and purchase under which KCRC

agreed to assign certain properties (the “Category 1B

Properties”) to the Company on the Merger Date. The

relevant assignment was executed between KCRC and the

Company on 2 December 2007.

Category 4 Properties On 9 August 2007, Government entered into an

undertaking that it would, within periods to be agreed

between the Company and Government, offer to the

Company a private treaty grant in respect of certain

development sites (the “Category 4 Properties”). The

terms of each private treaty grant shall generally be

determined by Government, and the premium for each

private treaty grant shall be assessed on a full market

value basis ignoring the presence of the railway other

than the Tin Shui Wai Terminus, Light Rail, Yuen Long,

New Territories.

On 9 August 2007, the Company issued a letter to KCRC

confirming that, if there should be any railway premises

on the Category 4 Properties, the Company would assign

the railway premises to KCRC.

Metropolis Equity Sub-participation Agreement The Metropolis Equity Sub-participation Agreement

was entered into on 9 August 2007 between KCRC and

the Company. KCRC is obliged to act on the Company’s

instructions, and pay to the Company any distributions,

or proceeds of sale, relating to its shareholding in

the property management company The Metropolis

Management Company Limited (“Metropolis”). The issued

share capital of Metropolis is 25,500 A shares (which are

held by KCRC) and 24,500 B shares (which are held by

Cheung Kong Property Management Limited). Metropolis’

business is property management.

F Application of Merger-related WaiverIn relation to the Operating Agreement and the Service

Concession Agreement, pursuant to paragraph A of the

Merger-related Waiver, the Stock Exchange granted a

waiver to the Company from strict compliance with all

the continuing connected transaction requirements of

Chapter 14A of the Listing Rules.

MTR Corporation174

CAPITAL AND REVENUE EXPENDITURE There are defined procedures for the appraisal, review and

approval of major capital and revenue expenditures. All project

expenditures over 0.2% of the net assets of the Company and

the employment of consultancy services over 0.1% of the net

assets of the Company require the approval of the Board.

REPORTING AND MONITORINGThere is a comprehensive budgeting system for all operational

and business activities, with an annual budget approved by the

Board. Monthly results of the Company’s operations, businesses

and projects are reported against the budget to the Board and

updated forecasts for the year are prepared regularly.

TREASURY MANAGEMENTThe Company’s Treasury Department operates within

approved guidelines from the Board. It manages the

Company’s debt portfolio with reference to the Preferred

Financing Model which defines the preferred mix of financing

instruments, fixed and floating rate debt, maturities, interest

rate risks, currency exposure and financing horizon. The

model is reviewed and refined periodically to reflect changes

in the Company’s financing requirements and the market

environment. Derivative financial instruments such as

interest rate swaps and cross currency swaps are used only

as hedging tools to manage the Group’s exposure to interest

rate and currency risks. Prudent guidelines and procedures

are in place to control the Company’s derivatives activities,

including a comprehensive credit risk management system

for monitoring counterparty credit exposure using the Value-

at-Risk approach. There is also appropriate segregation of

duties within the Company’s Treasury Department.

Major financing transactions and guidelines for derivatives

transactions, including the credit risk management

framework, are approved at the Board level.

COMPUTER PROCESSING There are defined procedures, controls and regular quality

reviews on the operation of computer systems to ensure the

accuracy and completeness of financial records and efficiency

of data processing. The Company’s computer centre

operation and support, help desk operation and support

services, and also software development and maintenance,

have been certified under ISO 9001:2015. Disaster recovery

rehearsal on critical applications is conducted annually.

For cyber security, the Company has been certified with

ISO 27001:2013 on the Information Security Management

System that complies with the required standard for the

comprehensive scope of IT services operation. The Corporate

Cyber Security Committee sets the direction, strategy, and

policies related to cyber security for the Company. It steers

and oversees the management and performance of all

matters relating to cyber security. Various security controls

have been implemented and are reviewed regularly to

protect the Company from cyber-attacks.

PERMITTED INDEMNITY PROVISIONPursuant to the Articles of Association, subject to the statutes,

the Company will indemnify every Director of the Company

out of its own assets against any liability incurred by him/her in

the execution of his/her office in defending any civil or criminal

proceedings. The relevant Article was in force during the year

ended 31 December 2019 and on 5 March 2020 when this

Report was approved. To ensure sufficient coverage is provided,

the Company undertakes an annual review of the Directors’

and Officers’ liability insurance policy of the Company (the

“D&O Insurance Policy”) in light of recent trends in the insurance

market and other relevant factors. The D&O Insurance Policy

also indemnifies the other directors within the Group.

GOING CONCERN The Consolidated Accounts on pages 182 to 262 have been

prepared on a going concern basis. The Board has reviewed

the Group’s budget for 2020, together with the longer-term

forecast for the following five years and is satisfied that the

Group has sufficient resources to continue as a going concern

for the foreseeable future.

AUDITORSThe retiring auditors, KPMG, have signified their willingness

to continue in office. A resolution will be proposed at the

forthcoming AGM to reappoint them and to authorise the

Directors to fix their remuneration.

For and on behalf of the Board

Gillian Elizabeth Meller

Company Secretary

Hong Kong, 5 March 2020

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DIRECTORS OF SUBSIDIARY UNDERTAKINGSThe directors of the subsidiary undertakings of the Company during the year and up to the date of this Report (unless otherwise

stated) are listed below:

Name Director Alternate Director

Altamirano Celis, Sandra Elena √

Arrowsmith, Stephen √

Auyeung Pak-kuen, Rex √

Bailie, William Paul √

Butcher, Stephen Anthony* √

Chan Chi-kun √

Chan Wai-man, Raymond* √

Chan Yuen-ping* √(Resigned)

Dr Chan Yuen Tak-fai, Dorothy √

Cheng Wai-ching, Margaret* √

Choi Tak-tsan* √(Resigned)

Chow Chiu-wai* √

Chow Chun-ling* √

Chu Fung-kuen, Margaret √

Collis, Charles G. √

Dalin, Bengt Carl Harald Henrik* √ √

Damm, Bo Fredrik √

Downie, Brian Francis* √ √

Edlund, Lars Anders √

Elfving, Hans-Åke Börje √(Resigned)

Espinoza Ceballos, Natalia √(Resigned)

Dr Ewen, Peter Ronald √

Dr Fong Ching, Eddy √

Fu Oi-yu* √

Fung Wai-yee* √

Hellners, Karl Erik Hjalmar* √

Ho Ka-wa* √

Holness, Nigel Graham √

Hor Wai-hong √(Resigned)

Hui Leung-wah, Herbert* √

Jensen, Frederik Mark* √

Jia Jun √

Jim Kwok-wah* √ √(Resigned)

Jones, Niel L. √

Jubian, Albert √

Dr Kam Chak-pui, Jacob* √

Kwok Lai-kay, Lena* √ √

Kwong Chung-hing* √

Lai Ching-kai* √(Resigned) √

Lau Ping-cheung, Kaizer √(Resigned)

Lau Tin-shing, Adi* √

Lau Wai-ming* √

Dr Lee Kar-yun, Tony* √

Lee Wai-ying √(Resigned)

Lee Yuen-ling* √

Leong Kwok-kuen, Lincoln* √(Resigned)

Leung Yiu-fai, David √

Li Sau-lin, Linda* √

Li Zhe* √

Name Director Alternate Director

Liu Chung-gay √

Lo Yiu-cho √(Resigned)

Long, Jeremy Paul Warwick* √

Lung Tze-ho* √ √

Luo Jiancheng √

Professor Ma Si-hang, Frederick √(Resigned)

McCusker, Andrew* √

McKenzie, Andrew Charles* √

Meller, Gillian Elizabeth* √

Meyer, Peter* √

Moros, Tony Antonio √

Murphy, Stephen John √

Mylvaganam, Deva Rajan* √

Nelson, Michael John* √

Ng Yuen-fan, Hannah √

Nilsson, Per Håkan Lennart* √

Norris, Mark Frederick* √

O’Flaherty, Raymond Anthony √

Oscarsson, Karl Johan* √(Resigned)

Pang Hoi-hing* √

Pira, Tomas* √(Resigned)

Qian Yu-hong √

Schelin, David √(Resigned)

Seto Siu-wah, Lisa* √(Resigned) √(Resigned)

Shao Jianming √

Shen Linchong √

Sin Pik-kwan* √

Söderström, Tim Rafael √

Suen Yiu-tat √

Tam Lup-kwan* √ √

Tang Chi-fai, David* √

Waymark, Leah Nicole √

Wennerberg, Matti Sigfrid Hasse √(Resigned)

Wikman, Jens √(Resigned)

Dr Wong Chi-yun, Allan √

Wong Ho-leung* √

Wong Kin-wai √

Wong Kwan-wai, Sammy* √(Ceased)

Wong Ping-sau* √

Wong Wing-kin* √

Xia Jing √

Xu Muhan* √

Yam Pak-nin* √ √

Yeung Mei-chun, Jeny* √

Young Ka-fan, Glen √

Yuen Lai-ki* √

Yuen Lap-hang √

Zhu Chunlei √

* Person who serves as a director and/or an alternate director in more than one subsidiary.

MTR Corporation176

REPORT OF THE MEMBERS OF THE BOARD - MTR

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Transcript of REPORT OF THE MEMBERS OF THE BOARD - MTR